What is a Lottery?

Lottery is a form of gambling in which people pay a small sum to have the chance to win a larger amount of money or other goods or services. The term lottery is also used to refer to a system of allocation or distribution of some resource such as subsidized housing units, kindergarten placements or university tuition grants. Lotteries are typically state-sponsored and operated as public service activities to generate revenue for specified purposes. In the United States, lottery proceeds have been earmarked for educational scholarships, road construction and other public works. Private lotteries are also popular in some countries.

The drawing of lots to determine decisions and fates has a long history, including several cases mentioned in the Bible. The first recorded public lottery to offer tickets with prize money of any size was held in the Low Countries in the 15th century, for raising funds to repair town fortifications and to help the poor.

A lottery must have a mechanism for recording the identities of bettors and the amounts they stake, and for pooling the results. This is usually done by a network of distributors that sell tickets for the lottery and then record the information electronically or on paper. Frequently, the lottery organization divides each ticket into fractions such as tenths and sells these to agents for marketing on the streets. A proportion of each fraction is paid as a prize and the remainder is collected by the lottery organization for operating costs, profits and administrative expenses.